If you’ve had your eye on (or hands in) real estate for any time at all, the idea of purchasing self-storage units for investment purposes has probably crossed your mind a time or two. What’s not to like? Lower building and management costs and a national failure rate of less than ten percent. Where does the line form to get into this?
At Empowered Investor, we always believe income property investing should be your first, best choice. History bears us out on this but sometimes permutations on the scenario creep onto our radar like mobile home parks. Another option you might want to check out is a self storage facility. Easy start up, easy maintenance, low risk.
There must be a catch, right?
There’s not really a catch but you should be prepared to put your time, energy, and money into the endeavor. Here are a few other considerations.
1. If you build it, will they come? Before you do anything, find out if your area will support a self storage facility. Even if you have experience in real estate, consider hiring a consultant to do a feasibility study. If nothing else, it will provide an unbiased second opinion.
2. Location, location, location! A low priced parcel of land might not be the best option. You’ll likely be off to an even better start if you make it highly visible and on a major travel corridor.
3. Buying or building? Construction loans are dramatically different from other forms of financing. Save time and effort by calling the bank first to find out if they have unique loans for a self storage business.
Of course, there’s more to it than this. Stay tuned later in the week when we get more in depth on the topic of self storage investing.
